Category Archives: Economics

Wow, this first and last full day of the conference has been absolutely amazing, in many ways. I’ll blog specifics about each session tomorrow when I’ve had time to soak everything in and review my notes, so let’s call this a short man-on-the-street account of the day. I’m writing this as I upload pictures but the open wireless access point I’m on has a very weak signal so it’s making it a little hard to work. I took about thirty pictures, and many of them came out well so I’m happy with that. They are up now but as of yet uncaptioned. So how was the day?

It got started with me waking up naturally, which was good because I had accidentally set my alarm for PM instead of AM, and if I had been late I never would have lived it down. I walked to the bank, which was close enough to be comfortable but farther than I thought. A walk is a good way to start the morning. There was a “breakfast” with various fruits and light food available, and though I was hungry for something a little more substantial it held me. I found Scott and Iram at a good seat right in the middle of the conference room.

The first session consisteted of Bob McTeer, Rose and Milton Friedman, and Alan Greenspan who joined in over a video link. Greenspan gave a glowing introduction to Milton and it was one of the most sincere speeches I’ve ever heard him give, very conversational and comfortable. (Contrast his reports to congress.) Greenspan stayed in on the conversation that followed for a bit before signing off.

The first session on education dealt with choice in schools and vouchers. I thought it was one of the more productive sessions of the day. After that was lunch where I ended up at a table with Iram, Scott, Steven Landsburg, another fine gentleman from Rochester whose name escapes me, and Tyler Cowen. Our conversations sort of fragmented till I heard the word “blog” from across the table and tried to get their attention for a minute asking if any of them had one. Finally I ended up calling out one of their names and I discovered Tyler blogs at Marginal Revolution, whose name I love, and at The Volokh Conspiracy (less frequently). The conversation that followed was very interesting and ranged from how blogs are changing the way people interact with writing to controlling spam, two topics I find myself coming back to again and again.

The second session is one I’m going to have to think about a lot more. The presenters from PERC (I have no idea what that acronym stands for) basically argued for free market enviromentalism, or that the best way to solve economic problems is by exposing the elements to the open market and letting those forces work things out. The idea was pushed several times that the ideas of socialism and command economies took the better part of a century to defeat, and millions died as a result of that debate not being resolved to the extent that it was clear what choice was the best way to run a country. It follows that the socialist ideas being pushed by many enviromentalists could have a similar effect today. They seemed very serious about what they spoke of, and I respect that. It’s easy to forget that these economic decisions have profound effects on the world.

The third session was, to me, mostly not terribly interesting so I won’t write about it here. After it was done though I did a picture with Milton Friedman.

In the fourth session the topics didn’t seem to mesh like they had in previous sessions but they were all interesting. It got started off with Tyler who I had met earlier (picture) who discussed economics and art, which I’ll write more about later, followed by a paper comparing Capitalism and Freedom and Free to Choose and finally a presentation by Gregory Chow that quite frankly I’m still not sure what to think of but I’ll talk more about all that tomorrow.

After it was all said and done I enjoyed it all but part of me wished there had been more debate or confrontation on the ideas that had been presented. I was reminded of Joi’s complaints of traditional conferences and how the paper presentation model isn’t really that great for taking advantage of the great minds gathered in one spot for this occasion. Dinner, however, proved interesting.

I sat with Scott at the table with Tyler Cowen, Pete Boettke, Greg Chow, and one or two others I couldn’t name. Just a few feet away at the next table were Rose and Milton Friedman sitting with Bob McTeer, Harvery Rosenblum, Ben Benanke, and another Nobel prize winner Gary Becker. At the end of his speech Becker posed a question to Milton Friedman concerning competitive supplies of currency, to which Friedman responded he had no good answer at the moment. However at some point Gregory Chow jumped in (and got a microphone) and it turned into a minature debate between the three which I found quite enjoyable. It went for a bit and it was obvious that some people were getting quite annoyed, though whether it was with Chow himself or Chow’s views (China isn’t as bad as it seems, state run enterprises can work if there’s competition) I don’t quite know. Personally I could have watched them go all night, as it was extremely entertaining and informative, but President McTeer cut things off and the night finished up. Please excuse any typos, I’ll edit this entry and post more about the indvidual sessions tomorrow.

I knew I kept the economics category around for a good reason. Tonight through Friday I’m going to be in Dallas because I was invited to the “Legacy of Milton and Rose Friedman’s Free to Choose” conference here at the Dallas Federal Reserve Bank. Internet access during the conference is probably not going to happen, as it’s unlikely I’ll be able catch anything wireless or just plug into the wall somewhere, so I can’t promise live-blogging of the sessions, but I can pick up a few access points here where I’m staying so I’ll try to catch up every night. I’m very excited about the oppurtunity to meet Milton Friedman, who was very influential in my early studies. His influence is undeniable, and I’m honored to be here.

The drive was long but in good company with my old friend Iram in the passenger seat. We discussed a lot of current issues, Plato’s Republic which she is also studying, and how our economic viewpoints have changed in the two years since we won the Houston and district-level Fed Challenge competition. I dropped her and her mother at their relative’s house, and made my way back by the Bank where Scott Roman, my former teacher/coach and now head of education for the Dallas Fed, lives and also where I’m crashing. It was a little tricky getting here, but now that I am the exhastion from the drive is starting to catch up with me and I think it’s time for some sleep. Breakfast at 9 tomorrow. Planning to take lots of pictures.

While browsing around I stumbled on this post which I think makes some very interesting points in terms of the implications for the dollar. Check it out and my response is below. If it wasn’t on LiveJournal I would trackback, but lacking that:

That’s very thorough. I think you have some excellent points, but I think you dismiss fiat money too quickly. It isn’t backed by nothing, it’s backed by all of the goods and services produced in the US. Those goods and services are currently about a quarter of the world’s total, which is far ahead from the second best, Japan.

People put money in America for the very reasons you stated, and it will stay there for those reasons. Without major changes the euro’s future is not bright because (a) they’re trying to take what was a very smart economic union and turn it into some sort of political union, which anyone familiar with European politics will tell you won’t work and (b) they are currently having problems with their unified monetary policy being an ill fit for all involved. The EU does not have the market transparency and labor flexibility that the US has, and probably never will because of deeply ingrained cultural and language issues.

This is a response to a message from a forum I frequent. I’m glad with the way a couple of the points came out, so I thought it would warrent reposting in the economic category here.

Republican – greed, Democratic – opportunity for ALL economic levels

I strongly disagree with incredibly broad misinterpretation of our nation’s political landscape. Unfortunately though, I’m going to respond with another generalization. As a party, the ideological trend is for Democrats to prefer larger government and social (socialist) programs to redistribute wealth taken in through taxes. People complain that Republicans are greedy, or heartless and cut spending for this and that, but what they’re really doing is trying to decrease our nations massive debt and lower taxes, which means less of a burden on your pocket and on future generations. Miasdad made the great point that no country has succeeded with the government trying to control the economic factors of production or distribution. When they (Republicans) cut subsidies for, say, green clay pottery makers, they do two very important things (really two parts of the same thing). Lower spending can mean lower taxes, and paying down of some of the debt; the interest on the debt alone takes a significant portion of every dollar you give to the government. Much more importantly is the effect it will have on the bond market, through crowding out.

Explained very simply, if you’re Joe Bank and have a big wad of money to lend to someone, you can either give it to to a company or the government. The government has never defaulted on a debt, so you know you’re going to get your money back. To attract capital corporations are forced to offer bonds at lower prices/higher yields, because a component of interest rates is risk. So in effect the government is crowding out private investment. Entrepreneurship is what drives this country, and personally I would rather have the free market deciding where the money should go, rather than some politician. Because the borrowed money is costing the corporations more that’s less money they have less to invest, create jobs, and give money to workers who just may go out and buy green clay pottery. Republicans believe that the ultimate economic cost of the crowding out effect negates (to varying degrees, depending on who you ask) whatever benefits you may have gotten from the government spending.

Now you may ask why people like George W. Bush and Ronald Reagan spend money out the wazoo, and so do I, but the reason is that strong defense is a prerequisite for sustained economic growth. People will not invest and the economy itself cannot function when there is not security. That’s why, though I cringe when I see the numbers, I recognize the need for recent increases in defense spending.

People also say that Republicans only want tax cuts for the rich, and that every measure they propose is biased towards covering their rich butts. Well, the wealthiest 15% of our country pays 90% of all taxes, so any broad tax cut is going to seem biased towards the rich simply by definition. Furthermore, many would argue that, paradoxically, lowering taxes is actually the best way to get rid of our debt. How? Because less money being wasted by the government and more money in the private markets means higher productivity and growth, and when that’s combined with fiscal responsibility, that means we could grow out our debt with low taxes, the same programs we have now, and higher GDP for the country. Everybody wins.